Undercover Russian “Banker” in New York Worked for Russian Intelligence

LawFuel.com – News about the law – Evgeny Buryakov, a/k/a “Zhenya,” Who Worked For Russian Intelligence Under “Non-Official Cover” As A Banker In Manhattan, Was Also Ordered To Pay A $10,000 Fine And Ordered Removed From The United States

Preet Bharara, the United States Attorney for the Southern District of New York, and John P. Carlin, Assistant Attorney General for National Security, announced that EVGENYBURYAKOV, a/k/a “Zhenya,” who worked for a Russian bank in Manhattan, was sentenced today to 30 months in prison for conspiring to act in the United States as an agent of the Russian Federation without providing prior notice to the Attorney General.  BURYAKOV pled guilty on March 11, 2016, before U.S. District Judge Richard M. Berman, who imposed today’s sentence.

Manhattan U.S. Attorney Preet Bharara said: “Evgeny Buryakov, in the guise of being a legitimate banker, gathered intelligence as an agent of the Russian Federation in New York.  He traded coded messages with one of his Russian spy co-defendants, who sent the clandestinely collected information back to Moscow.  So long as this type of Cold War-style spy intrigue continues to go on in present-day New York City, the FBI and the prosecutors in my office will continue to investigate and prosecute it.”

Assistant Attorney General John P. Carlin said: “Evgeny Buryakov is being held accountable for his efforts to secretly operate as a Russian foreign intelligence officer in the United States.  Foreign intelligence officers attempting to illegally collect information pose a direct threat to our national security.  Working with our law enforcement and intelligence partners at tracking down and disrupting these clandestine operations against our country will continue to remain one of the National Security Division’s highest priorities.”

According to the Complaint, the initial and superseding Indictments, other documents publicly filed in this case, and statements made during court proceedings, including today’s sentencing:

Beginning in at least 2012, BURYAKOV worked in the United States as an agent of Russia’s foreign intelligence agency, known as the “SVR.”  BURYAKOV operated under “non-official cover,” meaning he entered and remained in the United States as a private citizen, posing as an employee in the Manhattan office of a Russian bank, Vnesheconombank, also known as “VEB.”  SVR agents operating under such non-official cover – sometimes referred to as “NOCs” – typically are subject to less scrutiny by the host government, and, in many cases, are never identified as intelligence agents by the host government.  As a result, an NOC is an extremely valuable intelligence asset for the SVR.

Federal law prohibits individuals from acting as agents of foreign governments within the United States without prior notification to the United States Attorney General.  Department of Justice records indicate that BURYAKOV never notified the United States Attorney General that he was, in fact, an agent of the Russia Federation.

BURYAKOV worked in New York with at least two other SVR agents, Igor Sporyshev and Victor Podobnyy.  From on or about November 22, 2010, to on or about November 21, 2014, Sporyshev officially served as a Trade Representative of the Russian Federation in New York.  From on or about December 13, 2012, to on or about September 12, 2013, Podobnyy officially served as an Attaché to the Permanent Mission of the Russian Federation to the United Nations.  The investigation, however, showed that Sporyshev and Podobnyy also worked as officers of the SVR.

BURYAKOV’s Co-Conspirators Are Recorded Inside the SVR’s New York “Residentura”

During the course of the investigation, the FBI recorded Sporyshev and Podobnyy speaking inside the SVR’s offices in New York, known as the “Residentura.”

The FBI obtained the recordings after Sporyshev attempted to recruit an FBI undercover employee (“UCE-1”), who was posing as an analyst from a New York-based energy company.  In response to requests from Sporyshev, UCE-1 provided Sporyshev with binders containing purported industry analysis written by UCE-1 and supporting documentation relating to UCE-1’s reports, as well as covertly placed recording devices.  Sporyshev then took the binders to, among other places, the Residentura.

During subsequent recorded conversations, Sporyshev and Podobnyy discussed, among other things, Sporyshev’s SVR employment contract and his official cover position, their work as SVR officers, and the FBI’s July 2010 arrests of ten SVR agents in the United States, known as the “Illegals.”

Sporyshev and Podobnyy also discussed BURYAKOV’s prior service with the SVR in South Africa.  BURYAKOV worked in South Africa between approximately 2004 and 2009, officially as a representative of VEB.  During a conversation about Sporyshev’s cover position in New York, Podobnyy related that, when BURYAKOV was working in South Africa, Podobnyy had dinner with an SVR official and BURYAKOV’s supervisor at VEB and that, during the dinner, the SVR official told the VEB official that BURYAKOV was an “employee of the Service,” i.e., the SVR.

Further, Sporyshev and Podobnyy were recorded discussing, among other things, their (i) attempting to recruit New York City residents as intelligence sources for Russia; (ii) taskingBURYAKOV to gather intelligence; and (iii) transmitting intelligence reports prepared byBURYAKOV back to SVR headquarters in Moscow.

The directives from the SVR to BURYAKOV, Sporyshev, and Podobnyy, as well as to other covert SVR agents acting within the United States, included requests to gather intelligence on, among other subjects, potential United States sanctions against Russian banks and the United States’ efforts to develop alternative energy resources.

BURYAKOV’s Intelligence Taskings

Sporyshev was responsible for relaying intelligence assignments from the SVR toBURYAKOV.

BURYAKOV Drafts a Proposal for the SVR’s “Active Measures Directorate”

For example, in May 2013, Sporyshev and Podobnyy were recorded discussing a proposal that BURYAKOV had drafted about a planned deal in which Bombardier Aircraft Company in Canada would manufacture certain airplanes in Russia.  Sporyshev noted that Canadian “unions were resisting” and that BURYAKOV’s “proposal [was] for MS” – the SVR’s Active Measures Directorate – to “pressur[e] the unions and secur[e] from the company a solution that is beneficial to us.”  Other evidence developed during the investigation showed that, around the time of this conversation, BURYAKOV had conducted Internet searches relating to Bombardier and labor unions and, earlier, had obtained news articles regarding the planned deal and attended a conference in Canada that Bombardier personnel also attended.

BURYAKOV Assists Sporyshev in Attempting to Obtain Sensitive Information About the New York Stock Exchange

Also, on May 21, 2013, Sporyshev called BURYAKOV, greeted him, and then described a tasking from “top sources” relating to three questions that ITAR-TASS, a Russian news agency, could put to the New York Stock Exchange.  Sporyshev called the defendant back approximately20 minutes later.   During the call, BURYAKOV proposed questions regarding (i) Exchange Traded Funds (ETFs), including the “mechanisms of their use to destabilize the market”; (ii) “curbing of trading robot activities”; and (iii) “technical parameters” and “other regulations directly related to the exchange.”  On July 8, 2013, a purported “Bureau Chief” for ITAR-TASS sent an email to an employee of the New York Stock Exchange that parroted the questions thatBURYAKOV proposed to Sporyshev.

BURYAKOV Assists Sporyshev in Analyzing the Effect of Sanctions

Another example of an intelligence tasking occurred in late March 2014.  Specifically, on or about March 28, 2014, Sporyshev was recorded telling BURYAKOV that Sporyshev needed help researching the “effects of economic sanctions on our country,” among other things.  A few days later, on April 2, 2014, Sporyshev called BURYAKOV and stated, in an intercepted conversation, that he had not seen BURYAKOV in a while, and asked to meet BURYAKOVoutside VEB’s office in Manhattan in 20 minutes.  A court-authorized search of BURYAKOV’s computer at VEB revealed that, at around the time of this telephone call, BURYAKOVconducted the following internet searches: “sanctions Russia consiquences” [sic] and “sanctions Russia impact.”

Two days later, on April 4, 2014, BURYAKOV called Sporyshev and, in an intercepted conversation, stated that he “wrote you an order list,” and suggested that they meet.  Approximately 20 minutes later, Sporyshev met BURYAKOV in the driveway of BURYAKOV’s home.  Their encounter, which was captured by a video surveillance camera located nearBURYAKOV’s residence, lasted approximately two minutes.  On the video footage, the defendants appeared to exchange a small object.

Clandestine Meetings and Communications

During the course of their work as covert SVR agents in the United States, BURYAKOV, Sporyshev, and Podobnyy regularly met and communicated using clandestine methods and coded messages, in order to exchange intelligence-related information while shielding their associations with one another as SVR agents.  These efforts were designed, among other things, to preserve their respective covers as an employee of VEB (BURYAKOV), a Trade Representative of the Russian Federation in New York (Sporyshev), and an Attaché to the Permanent Mission of the Russian Federation to the United Nations (Podobnyy).

During the investigation, the FBI intercepted numerous calls between BURYAKOV and Sporyshev in which one of the men told the other that he needed to meet for some purpose, such as to transfer an item (such as a “ticket,” “book,” or “list,”) or for a purported social purpose.  In fact, BURYAKOV and Sporyshev used this coded language to signal that they needed to exchange intelligence information.

FBI surveillance revealed that, at some of these meetings between BURYAKOV and Sporyshev, they exchanged documents or other small items.  Notably, despite discussing on approximately one dozen occasions the need to meet to transfer “tickets,” BURYAKOV and Sporyshev were – other than one occasion where they discussed going to a movie – never observed attending, or discussing in any detail, events that would typically require tickets, such as a sporting event or concert.

BURYAKOV’s Receipt of Purported Official United States Government Documents

In the summer of 2014, BURYAKOV met multiple times with a confidential source working for the FBI (“CS-1”) and an FBI undercover employee (“UCE-2”).  Both CS-1 and UCE-2 purported to be working on a casino development project in Russia.

During a conversation recorded on July 22, 2014, Sporyshev warned BURYAKOV that meeting with UCE-2 might be a “trap” but authorized BURYAKOV to go ahead so he could make a better assessment.

During the course of the subsequent meetings, and consistent with his interests as a Russian intelligence agent, BURYAKOV demonstrated his strong desire to obtain information about subjects far outside the scope of his work as a bank employee.  During these meetings,BURYAKOV also accepted documents that were purportedly obtained from a U.S. government agency and which purportedly contained information potentially useful to Russia, including information about United States sanctions against Russia.

*                *                *

In addition to the prison sentence, Judge Berman ordered BURYAKOV, 41, to pay a $10,000 fine and a $100 special assessment.  BURYAKOV was also sentenced to three years of supervised release.  Judge Berman also ordered that BURYAKOV be removed from the United States to the Russian Federation promptly upon the completion of his prison sentence.

For their alleged roles in the conspiracy, Sporyshev, 41, and Podobnyy, 28, are charged in two counts.  The first count charges Sporyshev and Podobnyy with a conspiracy to act in the United States as agents of a foreign government without first notifying the Attorney General, and carries a maximum penalty of five years in prison.  The second count charges Sporyshev and Podobnyy with aiding and abetting BURYAKOV’s actions in the United States as an agent of a foreign government without first notifying the Attorney General, and carries a maximum penalty of 10 years in prison.  These maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.  Sporyshev and Podobnyy no longer live in the United States and have not been arrested.  By virtue of their prior positions in the United States on behalf of Russia, both of them were afforded diplomatic immunity from arrest and prosecution while in the United States.  The charges against Sporyshev and Podobnyy are merely accusations, and these defendants are presumed innocent unless and until proven guilty.

Mr. Bharara praised the investigative work of the FBI’s Counterintelligence Division.

The prosecution has being handled by the Office’s Terrorism and International Narcotics Unit.  Assistant U.S. Attorneys Stephen J. Ritchin, Emil J. Bove III, Brendan F. Quigley, Anna M. Skotko, and Ian McGinley are in charge of the prosecution, with assistance provided by Deputy Chief Richard Scott and Trial Attorney Heather Schmidt of the Counterintelligence and Export Control Section of the Department of Justice’s National Security Division.

16-136

Follow us on Twitter: @SDNYnews
DO NOT REPLY TO THIS MESSAGE.  IF YOU HAVE QUESTIONS, PLEASE CALL THE PRESS OFFICE AT (212) 637-2600.

Attachments area